How to Avoid Wasting Money Over the Holidays

'Tis the Season to Spend, But You Don't Have to Blow Your Budget

Couple holding shopping bags
Kikovic/iStock

As the holiday season gets underway, fine-tuning your budget may be a top priority. When you have a firm spending plan in place, it becomes easier to avoid the overspending trap, which can potentially lead to racking up holiday debt

The  preparing for the holidays this year, up 3.4 percent over last year's average. Making a detailed shopping list and checking it twice can help you stick to your budget but it's not always foolproof.

As you head to the stores or browse online, here's what you should be aware of to avoid wasting money during the holidays. 

Plan Gift Purchases Strategically

One of the biggest myths surrounding the holidays is that the best deals can always be found between Black Friday and Cyber Monday. In reality, stores may begin running sales in the weeks leading up to Thanksgiving or wait until after the Black Friday frenzy dies down to offer their lowest prices. Timing your purchases at the wrong time could lead to wasting money. 

If you have some very specific items you want to buy—such as electronics, appliances or jewelry—it's worth it to do some research to find out when those items tend to be priced most favorably. It's also worthwhile to compare prices across different retailers and see which stores have a price matching policy. Just remember to read the fine print so you understand which items the store matches prices on and what's required to qualify.

And don't wait until the last minute to try to find savings. Shopping at the 11th hour could lead you to spend more if you feel pressured to buy a gift without comparing prices. 

Skip Sites That Don't Offer Free Shipping

As you plan your holiday gift-giving budget, one cost you may not factor in is shipping for items you purchase online.

If you're doing most of your shopping from home to avoid the crowds at the mall, that can add to the total cost when you're paying shipping fees. To avoid wasting money, you should focus your online shopping efforts on stores that offer free shipping instead. 

Remember, how to check the terms of free shipping deals beforehand. At some stores, you may have to spend a certain amount to qualify for free shipping. In an effort to save on shipping fees, you may end up loading your cart with unnecessary items, which could work against your budget. Also, be on the lookout for the annual Free Shipping Day, when retailers nationwide offer free shipping to online shoppers. 

Say 'No Thanks' to Extended Warranties

If you're buying big-ticket items over the holidays, such as video gaming consoles, flat-screen TVs or a new laptop, chances are you'll be asked whether you'd like to purchase an extended warranty. Depending on what you're purchasing, an extended warranty could run from a few dollars to a few hundred dollars. 

An extended warranty may save you in the worst-case scenario but you have to consider how likely you are to use it in the long run. Before you shell out extra money for an extended warranty or service plan, consider how long the existing warranty lasts.

If you're already getting a two- or three-year warranty, for example, an extended warranty may not be necessary if the item in question would need to be replaced before then anyway. 

If you're paying with a credit card, you may already have extended warranty protection built in. Many credit cards included an extended warranty as part of their card member benefits. Be sure to review your card's terms and features before buying in to any warranty plan a retailer is attempting to sell you. 

Keep Track of Charitable Donations

The holiday season is a time for giving but just like shopping for gifts, your giving budget should also be planned out in advance. Donating a few dollars here or there may not seem like much but it can easily add up and before you know it, you're wasting money and stretching your budget thin.

Before you give, calculate how much you can afford to donate this holiday season. Then, earmark those funds to the organizations you want to give to. Having some focus as you give can keep you from overspending and it can also be more impactful if your dollars are being directed for a specific purpose. Just be sure to get receipts for your donations if you plan to claim a deduction for them on your taxes. 

Manage Your Schedule

Shopping is just one of the things that can tie up your time (and your wallet) during the holidays. At this time of year, you may be getting invitations to holiday parties and get-togethers with friends and families. Depending on the nature of the event, you might be expected to bring food, alcohol or a hostess gift when you attend, all of which can add to your holiday spending tally. 

If you want to sidestep wasting money over the holidays, it helps to be selective when it comes to social outings. Saying 'yes' to every event you're invited to could easily put a drain on your finances. Instead, pencil in one or two parties or dinners that are musts and take a rain check on the rest. If friends or family still want to get together, suggest a low-cost alternative, like a picnic in the park or sharing some hot cocoa on the back porch. That way, you can still get in quality time with the ones who matter most while keeping your holiday budget intact.